Estate Planning In A Pandemic

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As you read this article, I hope you and your family are well. The last seven months (has it only been months, when it feels like years?) have been an unprecedented time in American and world history, at least during my lifetime. After fielding numerous nervous calls from friends, family, and clients over the last several months, with questions and a renewed interest in estate planning, it seemed like a prudent time to write an article addressing these issues.

What is an Estate Plan/ What Documents do I Need?

Many people think of an estate plan as a Will that tells everyone what happens to their things when they die. This, however, is a narrow view of estate planning. A well drafted estate plan can serve a much broader purpose and should include more documents than just a Will.

A proper estate plan contains four vitally important documents: 1. A Will; 2. A Health Care Proxy; 3. A Living Will; and 4. A Durable Power of Attorney. If you do not have all four documents, you do not have a complete estate plan. A Will is only effective after your pass away, whereas a health care proxy, living will and durable power of attorney are effective only during your life and have no effect and power as soon as you pass away.

Health Care Proxy

A health care proxy appoints someone to be your health care agent. Your health care agent can make medical decisions for you in the event you cannot make those decisions for yourself. A health care proxy is an essential document to have in place, not just during a pandemic.

Additionally, be sure that your health care proxy contains language that conforms with the Health Insurance Portability and Accountability Act of 1996 (better known as “HIPAA”), to allow your health care agent to access your confidential medical records and/or receive your medical information, in the event you are incapacitated and cannot communicate with them. The purpose of HIPAA is to prevent the unauthorized access of an adult’s private health care information. Without a health care proxy with language that specifically allows the health care agent to access medical records, health care providers are legally prohibited from releasing such information.

You can only appoint one health care agent at a time. However, you can appoint one or more back up health care agents, that can act in the event the first health care agent is unable to act as your health care agent. Again, since only one health care agent can serve at a time, the backup agents will serve as health care agent in the order of appointment.

Living Will

Your Living Will, sometimes referred to as an “Advanced Directive”, works in conjunction with your health care proxy, and advises your health care agent and/ or your medical provider of your wishes concerning medical treatment and artificial life sustaining measures and other end of life care measures, in the event you cannot communicate your wishes yourself.

Durable Power of Attorney

A durable power of attorney appoints an agent, called an attorney-in-fact, to handle your financial affairs if you cannot. Since the power of attorney is “durable” it remains in effect even after the person whom has given the power becomes incapacitated. The usefulness of a power of attorney can be immense. The power of attorney can be used for such innocuous things as allowing the person you appoint to assist with your banking so that your bills get paid, to as serious as managing all of your financial affairs if you were to become incapacitated. In the event of incapacity, without a power of attorney no one would be able to manage your financial and legal affairs without petitioning the court for guardianship.

Unlike the health care proxy, under a durable power of attorney, you can appoint more than one attorney-in-fact. If you appoint more than one attorney-in-fact, you can make it so your attorneys-in-fact must act together, so, for example, they would need to counter sign all checks, which adds a system of checks and balances, or you can make it so your attorneys-in-fact can act separately, so that they can divide the duties.

Last Will and Testament

One function of your Will is to dictate how your assets should be distributed upon your death. However, a Will can do a lot more than just distribute your assets. In your Will you appoint an executor, to administer your estate. Without a Will someone will have to petition the Surrogate’s Court to be appointed as administrator of your estate. More than one person can petition to be your administrator and a legal battle can ensue. Additionally, and most important, if you have minor children, your Will appoints a guardian for those minor children. If no guardian is appointed for your children a court proceeding must be held to determine the guardianship of your children. You can also create trusts for your spouse and children in your Will. These trusts can serve a variety of purposes, such as making sure your assets ultimately pass to your children after your spouse’s death, asset and creditor protection for your children, and estate tax planning, just to name a few.

Do I Need to Update My Estate Plan?

If you have an estate plan in place, now is a great time to review that plan to make sure it continues to best meet your needs. First, in order to review your estate plan, you should make sure that you have copies of your documents. If you do not have copies of your estate planning documents the attorney or firm who drafted them should be able to provide you with copies.

Second, make sure you know where the originals are. Many attorneys will keep a client’s original documents in their firm’s vault for safe keeping, as a courtesy. If that is the case make sure your heirs know what firm is holding your original documents and whom they should speak with there. As an aside, your safe deposit box is a terrible place to keep your Will. Upon your death your nominated executor would need to actually be appointed as executor before they could open your safe deposit box. Bad news, the document that they need in order to be appointed executor (your Will) is in the safe deposit box. This means they will have to petition the Surrogate’s Court for an order allowing them to search your safe deposit box. This will only serve to add time and expense to the administration of your estate. Too long didn’t read version: almost any place is a better place for your Will than your safe deposit box.

Third, when reviewing your estate plan, look to answer these questions:

1. Are the people I have appointed as my fiduciaries, e.g. health care agent, attorney-in-fact, executor, guardian, trustee, etc., still the best people for each role? If you’ve been divorced since implementing your estate plan, your brother-in-law may no longer be a great choice to be your health care agent. Also, often people appoint their parents or a contemporary, that at the time was ready, willing and able to serve, but today is not in the position to serve as a fiduciary. Even if you want to keep your fiduciaries the same, now may be the time to add another layer of successors in the event the people you initially appoint are unable or unwilling to serve.
2. Does my Will best reflect my wishes for the distribution of my assets? Perhaps you have had more children, or now have grandchildren you wish to provide for. Maybe you established a lifetime trust for a minor child, but now feel they should receive the assets outright or vice versa, you now feel that your child is irresponsible with money and needs to be protected with a lifetime trust. Also look to specific bequests, and make sure you still have the item you are giving away and make sure you still want to give it to that person.
3. Remember your Will is only going to dictate how probate assets pass. Probate assets are assets that do not have a named beneficiary. Non-probate assets are assets that do have a named beneficiary. Examples of non-probate assets are life insurance, 401(k)s, IRAs, and the like, that have a designated beneficiary. Now is the time to review your non-probate asset beneficiary designations and make sure your non-probate assets are going where you wish.

Considerations for Snow Birds

Any snowbirds who are gearing up to head back to Florida should consider implementing a health care proxy, living will and durable power of attorney for Florida, if they have not already. Unlike a Will, which you can only have one of, the execution of a new Will automatically revokes any prior Wills, you can have a Health Care Proxy, a Living Will and a Durable Power of Attorney for New York and also have their Florida equivalents, and both the New York documents and Florida documents would be valid and effective, unless revoked.

It is true that your New York Health Care Proxy, Living Will and Durable Power of Attorney are valid in Florida and should be accepted in Florida. The same is true that your Florida Health Care Proxy, Living Will and Durable Power of Attorney are valid in New York and should be accepted for use in New York. However, Floridians (and their New York counterparts) are used to seeing Florida documents and your use of your New York documents may cause you some unnecessary headaches. One reason for this is naming, in New York the document in which you appoint a person to make health care decisions for you in the event of incapacity is a Health Care Proxy, in Florida that document is called a Declaration of Health Care Surrogate. In New York the person you appoint to make your health care decisions in the event of incapacity is your health care agent, in Florida that person is called your health care surrogate. In New York the document you use to designate your wishes should you be in an irreversible vegetative state or similar condition is a Living Will. In Florida that document is called a Declaration. New York and Florida both use a Durable Power of Attorney to appoint an attorney-in-fact, but the forms are very different. The best practice is to have these documents prepared for both New York and Florida. In the event the person you appoint needs to use them, they will have no issues stemming from someone looking at an unfamiliar form.

How Can I Get My Estate Plan in Place?

In New York, to be valid, a Will, Health Care Proxy, Living Will and Durable Power of Attorney must be signed in front of two witnesses, who also sign the documents, attesting to the signor’s signature. Further, the witnesses need to be over age 18 and disinterested, meaning they are not appointed as a fiduciary within the documents, and they are not receiving a distribution or bequest. This signing process was usually done in an attorney’s office, where the attorney’s staff could serve as disinterested witnesses, or with an attorney going to the client’s residence and bringing their staff members as the disinterested witnesses. When the coronavirus pandemic began, the safe execution of estate planning documents in person became almost impossible. So, on April 7, 2020, Governor Andrew Cuomo signed Executive Order No. 202.14, which among other things, allows for witnessing of estate planning documents using “audio-video technology.”

In order to execute your estate planning documents via video conference, you must follow the provisions set out in Executive Order No. 202.14, which are as follows:

1. Establish a video conference using video conference software that you and your attorney feel comfortable using. I have personally used Zoom, FaceTime, Google Duo, Microsoft Teams, and Skype, for remote executions over the last few months and all have worked well. As a reminder, the video conference must be live, you cannot send a video to your witnesses of you executing your estate planning documents.
2. Have two witnesses also appear on the video conference.
3. If you do not personally know the witnesses, you must show your driver’s license or other government ID to the witnesses on the video conference.
4. Execute the estate planning documents, as per your attorney’s instructions.
5. You must electronically transmit the signature pages of your estate planning documents to the witnesses on the day that you sign them. If you have the ability to scan your documents, you can send them via email to the witnesses. If you and your witnesses have the ability to send and receive faxes, you can fax the signature pages. If all else fails, taking a picture on your phone and texting or emailing it to your witnesses will suffice.
6. Your witnesses must then print and sign the signatures pages you sent them and send the signed pages back to you.
7. Executive Order No. 202.14 also allows for your witnesses to sign your original estate planning documents, i.e. the one’s you signed on the video conference, as of the date you signed them, as long as you send the witnesses the original signature pages and the electronic copies within thirty days. So, the best practice would be, if you are comfortable with mailing the originals, to sign all of your documents and then mail them to your witnesses. Additionally, it is advisable to redo the execution of your estate planning documents once the novel coronavirus pandemic has ended and social distancing and self-quarantines are distant memories.

One final note, the original Executive Order allowing for remote execution of estate planning documents was only valid through May 7, 2020. Each month thereafter Governor Cuomo has issued a new Executive Order allowing for one additional month of remote executions of estate planning documents. Currently, remote executions of estate planning documents are permissible in New York through November 5, 2020. Each Executive Order that has extended Executive Order No. 202.14 has come on the final day for remote executions. Additionally, each successive Executive Order has not extended every provision of previous Executive Orders. My firm’s office is open and we are once again doing in person signings, however, if you would prefer to execute your estate planning documents remotely, it would be prudent to do so prior to November 5, 2020, because no one can predict whether the Executive Order No. 202.14 will again be extended.

If you have any questions related to this article or estate planning in general I am available at your convenience, to meet via teleconference, FaceTime, Skype, or whatever other means you feel comfortable, to answer your questions, review your current estate plan to ensure it continues to meet your needs or to discuss the implementation of an estate plan.

Please be well and stay safe.

About the Author

Daniel R. Bernard is an attorney who focuses his practice in the areas of estate planning, trust and estate administration, estate tax planning, business succession planning, and estate litigation, with an emphasis on planning for people who divide their time between New York and Florida (“snowbirds”). Dan is admitted to the New York bar, the New Jersey bar and the Florida bar.

Dan is an attorney in the Trusts and Estates Department of the Riverhead based law firm Twomey, Latham, Shea, Kelley, Dubin & Quartararo LLP (“Twomey Latham”). Twomey Latham is a 30 attorney full service law firm with offices in Riverhead, Hauppauge, Southampton, Southold, and East Hampton.

Daniel can be reached via email at: dbernard@suffolklaw.com or by phone at 631-727-2180 ext. 321.

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